Chapter7: Common Stock: Characteristics, Valuation, And Issuance
Section: Chapter Questions
Problem 12P
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Question
Red Sun Rising just paid a dividend of $2.37 per share. The company said that it will increase the dividend by 25 percent and 20 over the next two years, respectively. After that, the company is expected to increase its annual dividend at 4.3 percent. If the required return is 11.3 percent, what is the stock price today?
Multiple Choice
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$48.29
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$20.00
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$42.76
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$46.86
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$45.42
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